Hello everyone! I wanted to take the time today to speak about Silverswap. I dont want to make this too fluffy, so I will stick to a specific theme:
What game did Silverswap set up?
When we designed Silverswap we wanted to ensure that users were empowered by every system they encountered. We not only wanted people to feel like traders, but also like they were the ones running the show and had the abilitiy to earn like they were too. We looked at many many different systems and decided that none of them fit the bill for what we were trying to build. Each system had fatal flaws that we could not brush over: hyperinflation, penalties, locked positions, etc. Over many many weeks our team of dedicated defi experts designed what we have now. Our auction system. This is a system that is only capable of existing on a dex like Silverswap, with a team like we have. The team does not take any signficant portion of the accumulated fees (only 1.2%), nor does it take unnecessarily from liquidity providers(we give 90% of the accumulated fees to LPs, the highest on chain!). Instead we took the fees that would normally go to enriching a small group of people and democratized them so that everyone could eat well, regardless of what the market was doing.
Deflationary systems
So what are Silverswap Auctions?
Silverswap is composed of two different auction systems that power our sustainability. Each system uses deflationary mechanisms to ensure that AG does not become hyper inflationary, and will eventually be deflationary.
Flare Auctions:
Flare auctions are considered our buyback auctions. We utilize 12 hour epochs to segment our trading fees, 3.5% of the total trading fees that are generated by our platform are streamed to a singluar pot for Flare. Users can come to this auction and bid with their AG tokens to direct that pot of funds to buy the chosen token. At the end of the epoch, whoever has the highest bid gets their chosen token bought back with the entire pot.
These auctions are designed to be a way for projects, large and small to leverage their farm-earned, or purchased AG tokens to perform buybacks for their chosen token. This creates an easy way for projects to utilize a portion of the AG tokens they have accumulated to further support their projects in a way that provides much more bang for their buck! All of the AG tokens that are taken in as payment will be burned!
Snatch Auctions:
Snatch auctions are our most exciting feature! Each liquidity pool that we host accumulates its own pot of AG tokens equal to 5% of the fees that are collected in that epoch. Users can then come to bid on the pots of AG, with their own AG tokens, and whoever has the highest bid at the end of the epoch, takes the entire pot! Yes thats right, its free money. Of course, all of the tokens that we take in as payment, are burned!
These auctions are designed to give users a way to use their farm-earned or purchased AG tokens to not only support the ecosystem (via burns), but also to make some instant, risk-free money while doing so!
Giveaways:
In addition to our two auctions, we also have a giveaway system that will be going live shortly. This system accumulates a small number of AG tokens each week (.3% of the fees we collect) and places them in one large pot. Users can then trade 1 AG token for a ticket to a drawing. The winner of the random draw takes the entire pot!
Patience + Deflation = Winning
The kind of game that Silverswap has going is one that favors the patient. Our deflationary mechanism needs only general volume to make its flywheel spin and due to the nature of concentrated liquidity, volume is in no short supply. We have also not left anything up to chance. We have a brand new LSW coming to the market shortly. This LSW will be a major volume driver, not only for Silverswap, but for the entire Sonic ecosystem.
